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801 US billionaires control a record $6.2 trillion in wealth.The bottom 50% of Americans control $3.7 trillion in wealth.
When 801 people control more wealth than half a country’s population, we have a very serious problem. So says a long ago Secretary of Labor on social media post.
I assume, but can’t verify, these numbers are correct, but in any case I have to ask, what exactly is the problem? Sour grapes?
I attempted to learn the answer using AI, but could not find an answer that was on point and logical -yes, my opinion – except one.
That one answer is consistent with the opinion of many economists who don’t see great wealth as a problem, but rather the potential for great influence, great political influence, but of course that is not limited to billionaires or even individuals and as they say, it takes two to tango.
The wealth of others does not stop opportunity for me or anyone else. In some ways it creates new opportunities. Think of all the opportunities for products and services created by Apple and Microsoft. Consider the positive impact on retirement savings as stock values boosted account balances when the billionaires accumulated their wealth.
I look at many billionaires and think about the companies, even industries they created, the hundreds of thousands of jobs, the wealth and opportunities for others created in the process. In many cases their positive impact goes beyond their organization and includes their vendors and suppliers. Amazon has created many opportunities for small businesses who sell through them.
How did they accumulate great wealth? Mostly by investing, by the power of the stock market and later other types of investing. Isn’t that what we all strive for, except we didn’t start a company and issue an IPO while owning a few million shares.
If only I had made better use of my garage – I never had a dorm room.
In my opinion society can claim a net benefit even if these entrepreneurs paid no taxes and that does not include the philanthropic efforts of many super wealthy. Next time you visit a library there is a chance it’s there because one of those gilded age billionaires, Mr. Carnegie.
My net worth is 200 times that of my parents after adjusting for inflation. I don’t feel guilty. I invested, I saved. All of us have more wealth than someone else and someone else has more than us.
Reading what appears on HD shows investing and accumulating wealth, even planning to avoid or minimize taxes is considered smart and indeed it is. I see no reason to apply different standards based on the amount of money involved.
Becoming a billionaire fairly and honestly is a to be admired accomplishment not a envious moan about problem.
“I look at many billionaires and think about the companies, even industries they created”
That is truly elitist. Billionaires don’t single handedly create companies & industries.
Even billionaires admit that by their actions. Oh sure, when their companies are skyrocketing in value, they act like they are solely responsible.
But then when their companies lose value? Suddenly, they discover that all the other workers are solely responsible for the loss, billionaires never take a pay cut.
Worse, billionaires demand socialism for the rich, getting massive bailouts after they crashed the economy in the Great Recession; blackmailing cities to build stadiums for their private sports teams, and much, much more.
Even worse, life expectancy is lower in more unequal societies, even for the wealthy.
Billionaire factory farm owners overuse antibiotics on healthy animals. This leads
to antibiotic resistance — which already kills 40,000+ Americans a year, and very
well could lead to the next deadly, uncontrollable epidemic.
Billionaires can commit crimes with immunity, for instance dumping toxic waste on us.
This means deadly cancer and other bad health outcomes for all of us.
This post is not about individuals, their behavior or personality, it is about the idea that billionaires are not bad for society, they do not block opportunities rather more like create them and on balance most billionaires have a net positive impact on society.
Political activities have nothing to do with it. It doesn’t take a billionaire to create and distribute false and misleading information.
Musk and Zuckerberg political activities are a pretty effective counter to your entire argument. I think social media’s control over civic discourse has changed the entire argument.
When people amass these huge fortunes and then spend them controlling our government, the consequences are dire and disastrous and will get worse. It started with the Kochs, and “Project 2025” will destroy America, all funded by right wing billionaires.
The US defense relies heavily on Starlink and NASA on SpaceX. Remember when Musk cut Ukraine off of Starlink? Do we really want our national security dependent on Elon?
Look at Zuckerberg’s recent transformation. He believes in “companies not countries”. He also says “Meta” has no responsibility for stopping falsehoods about vaccinations, election deniers, etc and is sorry he apologized to parents whose kids killed themselves because of Facebook pressure. With his money he apparently can do anything he wants.
https://www.theguardian.com/commentisfree/2024/sep/27/mark-zuckerberg-metaverse-ai-elections-mental-health?CMP=Share_iOSApp_Other
Billionaires are the problem. None of them got there by being nice or supporting the common good. Bill Gates was cited by the NLRB for employment violations when Microsoft had fewer than 50 employees. The example of the Whaltons giving money for art museums ignores the fact that Walmart destroyed previously vibrant small town businesses.
Okay, one more post, then I’ll shut up.
1. I fail to see how social media “controls” civil discourse. It’s the people who post on social media who choose to either act civilly or not. Those who don’t act civilly generally engage in political arguments. Fortunately, Jonathan discourages political posts on HumbleDollar and is quick to castigate those who cross the line. I don’t see how this contributes to our discussion about billionaires.
2. Most of the billionaires I read about use their fortunes to found and nurture new companies as venture capitalists or owners. Most of their money seems to be invested in one way or another. It’s true that some billionaires make generous contributions to influence political candidates or parties. But this behavior is not restricted to billionaires, although they admittedly have greater influence than you or me.
Complaints about the influence of billionaires seem to arise when they contribute to candidates or causes we oppose. It’s telling that you mention the Kochs, but fail to mention George Soros, a “left-wing” billionaire, who presumably contributes to candidates or causes you support.
As I understand it, Project 2025 is a blueprint for conservative governance issued by the Heritage Foundation, a conservative think tank. To my knowledge it wasn’t directly funded by billionaires nor has it been formally endorsed as policy by any candidate as far as I know. No doubt liberal think tanks also issue government policy blueprints that they hope will influence liberal administrations.
You cite right-wing billionaires as a threat to destroy America, but you fail to mention threats by progressives to abolish the Senate filibuster and pack the Supreme Court. Billionaires aren’t responsible for our political divide. They’re just part of the political milieu we find ourselves in.
3. Yes, the U.S military does pay for services on Starlink so that must mean that the network is valuable. It may be unsettling that such a resource is controlled by Elon Musk, and I’m sure the DoD is looking for alternatives. But take note that this resource was developed by a billionaire, not the government. One more reason to discount the argument that the billionaires among us are harmful.
4. I’m no fan of Zuckerberg. If you wish to change his thinking, sign off of Meta, Instagram, and his other services. If enough people do so, I’m sure you’ll get his attention.
5. Regarding the NRLB action against Microsoft: What did Microsoft’s labor policy have to do with Bill Gates being a billionaire? Hasn’t the NRLB complained of labor violations by other companies founded and run by non-billionaires?
6. Walmart didn’t destroy vibrant small town businesses. The people in small towns flocking to Walmart for lower prices and better selection destroyed small town businesses.
Thanks for this lucid post. Please, don’t shut up!
Yup
Couldn’t have put it any better.
Here’s the headline and sub-headline on a story by Stuart A. Thompson in the NY Times last Friday (Sept 27):
“5 Days With Elon Musk on X: Deepfakes, Falsehoods and Lots of Memes”
“Almost a third of 171 posts last week from the X owner were false, misleading or missing vital context.”
“Almost a third”? That’s nothing — at least half of what appears in the NY Times is false, misleading or missing vital context.
Curious that just posting the headlines of a NY Times story gets so many down votes.
What has that to do with the point of the article?
You ask in your article “What exactly is the problem?” I simply provide an example.
May be a problem, but that is the individual, not he billionaire being the problem.
The individual billionaire who owns the problematic social media outlet. It’s hard to get more on point.
There are just as many such posts and worse all over X and other media from people not nearly billionaires, I don’t see how relating his wealth and his behavior are related.
He could still post if he didn’t own X and wasn’t rich.
If he didn’t buy Twitter he’d probably be banned along with Trump.
Read the article or don’t. It appears obviously relevant in my view to the way you framed your post. No more from me on this.
Thank you.
Amen.
Here is an article I wrote a few years ago showing that if the total compensation of Verizon’s CEO was given to workers it would amount to seven cents an hour or $145.60 per year for a full time worker. And to be fair, most of it not cash 🤑
“Amazon has created many opportunities for small businesses who sell through them.”
Too bad they charge huge fees to small businesses, about 40% or more for FBA. I was watching the Resale Rabbit fiscal year summary video, and he said he was actually charged more fees than he got in revenue, for a net loss before COG.
I’m guessing if that’s the case they shouldn’t be using Amazon. I’ve made purchases that came direct from China. It must be worth it for many suppliers or why do it?
That’s not FBA, so the fees are much lower. They’re probably paying 15-20%. The changes to the de minimus import rules is going to put the kibosh on these businesses.
I didn’t expect to wake up this morning finding I completely agree with Mr. Quinn! It’s a good day.
I tried to think of all the ways billionaires have harmed me. I couldn’t come up with anything.
An ex-Secretary of Labor claims that 801 people controlling more wealth than half the country is a serious problem. Pardon my asking, but what’s the problem?
Billionaires don’t just sit on a pile of cash and use it to live lavishly. Most of that money is invested which contributes to innovation, new companies, and a strong economy, all of which benefits us.
I assume that the ex-Secretary of Labor wants to see much of that wealth redistributed somehow. Then what happens to investment?
Consider the negative impact of billionaires on our lives the next time you use your iPhone, drive your Tesla, work on your laptop, watch Netflix or converse with your chatbot.
From Scott Burns website, posted 9/23/24:
In his book “Enough,” John Bogle tells an anecdote. Novelists Kurt Vonnegut and Joseph Heller attended a wealthy hedge fund manager’s party.
Vonnegut told Heller their host had made more money in a single day than Heller had made from “Catch-22.”
Heller said, “Yes, but I have something he will never have… enough.”
https://scottburns.com/index-investing-the-long-haul-and-your-life/
After countless occasions where I strongly disagreed with your rigid views on income focused needs for retirees (no, I don’t want to open that discussion again), it is finally nice to be able to give you a thumbs up on today’s article.
The “buy, borrow, die” loophole should be closed. This lets individuals borrow against their assets, live on that cash, and eventually pass those assets onto their heirs who now have a stepped-up basis, so no capital gains tax.
https://equifund.com/blog/buy-borrow-die/
https://www.forbes.com/sites/taxnotes/2024/02/27/taxing-billionaire-borrowing-a-new-kind-of-wealth-tax/
What about the up to 40% estate tax? After the loans are repaid of course. Would you eliminate the step up basis for us mere mortals too or just billionaires?
One might wonder whether there has ever been a billionaire who became so “fairly” and “honestly.”
I have to wonder how people like Bill Gates, Steve Jobs or Warren Buffet managed to earn their billions behaving unfairly and dishonestly.
If the author of the the quote below was Balzac, it was written during the first half of the 19th century when land was wealth—often originally acquired by conquest. In those days, the notion of a crime behind every great fortune probably wasn’t far from the truth. Most land was owned by kings and nobles who didn’t produce much of anything.
When we talk about wealthy individuals, I assume we’re not talking about drug lords or the heads of crime syndicates. Wasn’t the Balzac quote shown at the beginning of the movie The Godfather?
I don’t mean to make a blanket statement about all billionaires, but the article seems a bit too upbeat on the steady upright behavior of those in possession of more than one thousand million dollars. I’m inclined to more skepticism. “Money talks!” While money is talking, especially huge (obscene) amounts of it, it seems natural to me to suspect that fairness and honesty are vulnerable (even among the best of us).
Chris, I get your point. And I agree with you that those with money can use it to corrupt others who are too willing to be bribed for monetary gain. You don’t have to be a billionaire to play that game.
Billionaires, like the rest of us, aren’t angels. My point is that too often people seem eager to criticize billionaires for their excessive wealth without acknowledging their contributions to society.
As long as we also include the negative examples, such as the Sacklers, who prevented opportunity for thousands via the disability and death brought on by the opioid plague. One can think of other examples (fossil fuels, tobacco) where the billionaires at the helm put the bottom line over the health and well being of individuals and the environment by actively peddling misinformation. So it is short-sighted to suggest that billionaires are only investors who do not negatively affect any of the rest of us.
We seem to be shifting focus here.
The Sacklers owned and ran the pharmaceutical company Purdue, which falsely marketed OxyContin as a safe and non-addictive pain killer. Shame on them, not for being billionaires, but making bad business decisions. If they sought profits at the expense of people, that was a personal failing, not an indictment of billionaires.
I’m not aware of any billionaires actually running tobacco companies, but many may own stock in tobacco companies. Those of us owning broad market index funds also own stock in tobacco companies. Why? Tobacco companies are profitable and pay generous dividends. Despite all the warnings about the health effects of smoking, there is still significant demand for cigarettes worldwide. No misinformation here. Health warnings are printed on each pack of cigarettes. Billionaires aren’t misleading people to smoke.
All of us index investors, along with some billionaires, own stock in oil and gas companies. In spite of concern about climate change, there remains a heavy global demand for oil and gas. Billionaires aren’t the only ones buying gasoline for their cars or heating their homes with natural gas.
Yes, some billionaires behave badly, but so do the rest of us. It’s human nature. We aren’t moral, upright people suddenly transformed when our net worth passes one billion.
Let us not forget the positive examples of charitable foundations and university endowments funded by billionaires.
Returning to the original point. The mere existence of billionaires doesn’t harm us. People behaving badly harm us, and such people aren’t limited to billionaires. Billionaires have the resources most of us don’t have to fund innovation, start new companies, create jobs. Those with good intentions can certainly benefit society.
My main point is well captured in your paragraph about billionaires behaving badly as do the rest of us. My intention was not to single out billionaires, but to object to Richard’s white-washing of the whole lot of them, as though there are not glaring problems. Re: tobacco, yes, “now” there are warnings, but remember how long the coverup of scientific data by Philip Morris and the rest went on. Only legal action changed their focus on the bottom line alone. Those warnings did not appear as a voluntary action.
Exactly.
Look at how it was acquired in most cases- simply a function of the stock market in which anyone could have participated and many did. I wish I had bought Apple or Microsoft at their IPO.
This seems a bit simplistic. Not just anyone has the kind of money to invest in the stock market that would rocket one to a billion dollars.
No they don’t and in theory they do have the ability to start a company and issue an IPO. In reality nothing is stopping anyone except their abilities.
One only has to look at the history of racism in this country to see that you are not telling the whole story.
History is the key word. I stand by my statement. There are many examples.
“History” is the key word, so racism and all of its multi-generational injustices are now in the past?
Warren Buffett.
He was my own first thought.
This reminds me of an often (mis)-quoted line from Balzac.
Behind Every Great Fortune There Is a Crime
Or from another old text: love of money is the root of all evil.
Why do you say that?
It’s a variation on the old proverb (attributed to Lord Acton): power corrupts and absolute power corrupts absolutely. When talking about people who have, at the entry level, one thousand million dollars, one might legitimately wonder whether (at some point) things keep going their way because of the momentum of their money (leaving fairness behind). What honesty means at this level of wealth becomes complicated as the billionaire must rely on numerous others looking out for their interests, but not necessarily with their scruples. And surely all billionaires are not alike. The Buffets do indeed seem laudable, but your blanket assessment would also congratulate the Sacklers, the billionaires who brought us the opioid crisis. Plenty of dishonesty to go around there.
I agree. Everything is related to supply and demand. A familiar phrase is too become successful “find a need and meet it”. No matter what the business or industry that is successful this is what they’ve done. Consumers pay whatever they think something is worth. Employee agree to work for whatever amount they deem worthy of their effort or expertise. The billionaires in the world have meet a need and that is good, they employees many workers and that is good, both the owners and the employees spend their money on what they’ll need and/or want which helps the local, national, and global economies.
I am not jealous or envious of the rich. I am content
I don’t know what universe you’re living in, but it appears to come equipped with rose colored glasses.
Were you harmed by a billionaire?
R. Quinn seems to assume that none of the jobs and products produced by the companies these entrepreneurs founded would exist in their absence. The reality is that our winner take all system of capitalism allows small differences in performance to generate enormous differences in reward. A classic example is Mark Zuckerberg secretly starting his own social media domain shortly after the Winklevoss brothers enlisted him to work on their website ConnectU.
Love it when folks know what I assume. Fact is it’s doesn’t matter who.The point is people get rewarded for taking risks, creating things that people want and sometimes need.
In the past it was canals, railroads, steel, specialized machinery.
Something like 1/2 the wealth in America is inherited. Just imagine
the risks those trustafarians took finding the right parents!
Ask a soldier, a fire fighter, or a worker in a dangerous job about
those risks.
Meanwhile a risk free billionaire CEO does a lousy job and walks off with
a multi-million dollar golden parachute.
The estimate is about 35% of all wealth inherited, so what? I wish some would come my way.
Are they bad people, have they taken from anyone else?
That CEO is the problem of the shareholders not you and me. And there are very, very few billionaires who are CEOS who can be fired.
Some people get rewarded for taking risks, lots more don’t. Luck likely has a lot to do with it.
As I’ve posted before, CEOs, who often aren’t taking risks, are ridiculously overpaid in this country. Billionaires are inadequately taxed. And there is way, way too much money spent on elections, giving a few people far too much influence. .
Who says CEOs are overpaid? That is the business of their Boards and shareholders. Their pay has no impact on anyone else, especially given 60% or more of it is in the form of employer stock or related.
If CEOs and other senior executives are granted compensation packages that involve large amounts of stock, doesn’t that dilute existing shareholders? That sure doesn’t seem like “no impact on anyone else.”
This has also led to an excessive concentration on quarterly earnings, and a belief that shareholders are all important. The megacorp I worked for used to have three and five year plans, and consider it had a duty to its employees and communities as well as its shareholders. Not any more.
I agree, the focus on the next quarters earnings even longer is shortsighted and leads to poor short term decisions.
To me it also matters how those earnings were achieved. Cutting staff, cutting expenses and employee benefits is not valid earnings growth IMO.
That’s why I said their pay is the business of the Board and shareholders.
CEO’s exorbitant pay packages have a significant impact on the pay their employees receive if a certain return is expected from the investors. There is only one pie to be divided and CEOs get too large a slice.
In 2022, it was estimated that the CEO-to-worker compensation ratio was 344.3 in the United States. This indicates that, on average, CEOs received more than 344 times the annual average salary of production and nonsupervisory workers.
No, they don’t. I’ve done the calculations for several large corporations and it pretty much works out that CEO pay translates to about $.02 an hour for employees. That is NOT significant.
Their pay has no impact on the pay employees receive. Do the math. I have looked at several large companies including Walmart and Verizon and divided CEO total comp and salary by the number of employees and even if the CEO was paid nothing the impact per worker is negligible- Pennies an hour. And of course, no pay for the CEO is impossible.
Keep in mind most articles about CEOs really are only talking about S&P 500 CEOs and that’s not where most Americans work. Average CEO pay is much lower, much.
I was not addressing the average CEO compensation package. I was addressing those of major corporations.
I would consider Verizon, att, GM and ford major corporations.
I simply don’t care.
Somewhere I read that there are two main ways people can track themselves.
“Scoreboard” people are constantly comparing themselves to others.
“Dashboard” people look to how they are doing now as opposed to how they were doing in the past.
I guess I am a “Dashboard” guy.
I’ve been blessed with a loving family.
And Grandkids!!!
There is enough for our needs. And most of our wants too.
It’s nice many others are doing well. It’s unfortunate so many others are struggling.
“I simply don’t care.”
No better way to say it.
I don’t personally know any billionaires but I imagine they form a diverse group. Some likely acquired their wealth through admirable traits and behaviors, while others perhaps less so. And some simply inherited it. The media generally focuses more on how wealth is distributed than on how it was created. I agree with Jonathan and others that their opinions on how our government should operate are no more important than anyone else’s.
I don’t have strong opinions on whether the concentration of wealth in the hands of the few is good or bad. But I despise it when billionaires use their wealth to promote their political opinions, whatever those opinions are. That, I feel, makes a mockery of our democracy, where we supposedly each have an equal say. Moreover, while I’m willing to believe that successful business people may have something useful to say about running a business, I don’t believe there’s any reason to think they have any special insights on foreign policy, or social issues, or monetary policy — so it’s unfortunate when they use their money to promote those views.
I agree they have 1 vote each just like everyone else……..enough said I think
I have had similar thoughts when a celebrity lectures us on topics outside their area of expertise. I respect wealthy people who try to use their wealth for the common good rather than self promotion or influencing political races.
Even in their charitable endeavors they get to pick the winners and the losers!
Don’t you do the same when you give to charity – give to the causes important to you? I know I do.
One of the Waltons give a great deal to art endeavors. That’s fine, but I would rather see the money go to something like St Judes Hospital a place where some of our QCDs go.
Good point. On the topic of choosing winners and losers, I wonder whether some causes go unnoticed while others are well known. In the narrow case of neurological diseases for example, the American Brain Foundation distributes funds to researchers working on high profile problems such as Alzheimers, but also to those working on various rare and obscure disorders most of us have never heard of. I suspect similar entities supporting numerous causes exist to efficiently distribute gifts they receive.
Many of the billionaires included in the list were not investors, but entrepreneurs. Think of Henry Ford as a role model. These single minded, extremely driven individuals, can sometimes produce wealth at an extraordinary level. Elon Musk would be a current example. But, unlike most other people, their personalities and activities can also produce an outsized impact on society. And, it isn’t all good.
I think I said that in my article, they created, they built a company, they issued a IPO, became wealthy and then diversified their investments and became billionaires over and over. Sounds like a good plan. I wish I had done it.
I love the Carnegie libraries, I really do. Perhaps that’s in overlooking the past, though. Here’s a quote from Annie Dillard, in An American Childhood, probably in the collections of many of the Carnegie libraries:
“But a [Carnegie] steelworker, speaking for many, told an interviewer, ‘We didn’t want him to build a library for us, we would rather have had higher wages.’ At that time steelworkers worked twelve-hour shifts on floors so hot they had to nail wooden platforms under their shoes. Every two weeks they toiled an inhuman twenty-four-hour shift, and then they got their sole day off.”
That is the story of America is many industries at the turn of the last century – horrible working conditions and union violent conflict. Some biographers say Carnegie’s philanthropy was trying to make amends for the past. That is hardly the case today. Many modern billionaires helped make a lot of millionaires along the way, some of them their employees.
My problem is when you read facts such as the Walmart heirs’ combined net worth is nearly $332 billion.
I have a problem when I read a Government Accountability Office report from 2018 (I know it’s old, but I’m sure the story is the same) which stated that the, “GAO sent questionnaires to state Medicaid and SNAP agencies and analyzed data from 15 such agencies across 11 states. Each agency reported the 25 most common employers of Medicaid enrollees and SNAP recipients. Among the 15 agencies, Walmart was in the top four employers of program beneficiaries in each and every one. McDonald’s was a top-five employer of employees receiving federal benefits in 13 of the 15 agencies.”
This means that a great portion of their wealth comes from US taxpayers providing benefits for Walmarts’ employees that should be paid by the company.
I’m also willing to bet that the “most” billionaires did not get rich from investing, but from the companies, even industries they created. There is value in that, but their billions should not be partially achieved by their companies receiving corporate welfare paid for by taxpayers, or more reasonably increasing the Federal deficit.
The Walton family owns less than 50% of the company. Companies are not social agencies and investors reward companies based on earnings growth.
Look at it this way too. The jobs you reference were created by Walmart otherwise they would not exist and if there were other better paying jobs the workers could and should have left Walmart.
In addition, the existence of Walmart is based on low or lower prices which benefit the shopper in a community who rely on lower prices.
So, the Walmarts of the world must satisfy customers, investors and employees to exist and grow. Each has its own goals, often conflicting. You can’t pick one and say they takes priority, it won’t work.
Most McDonalds are privately owned the company does not determine wages, the owner does.
In any case, wages have risen from 2018 – and so have prices.
This is like the argument to increase the federal minimum wage, it sounds good, but let’s not forget the possible consequences because the impact goes far beyond the minimum wage worker.
I’m usually in concert with Richard’s rants. Not this time. Your points are spot on. I don’t have a problem with someone being crazy wealthy, but billionaires didn’t get there without the efforts of their employees. When workers earn more, they spend more, everybody wins.